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Mythbusting: Do You Need a Credit Check to Use Obamacare?

Credit scores have joined the ring of confusion surrounding the Affordable Care Act (ACA) and the newly opened health insurance exchanges.

While auto and homeowner’s insurance providers may check your credit score when you apply for coverage, health insurers do not assess applicants’ credit scores as a means to decide health plan costs or whether to grant someone coverage.

Translation: Of all the things people are worrying about as they try to get health insurance through Obamacare, credit history should not be one of them.

Some of the confusion around the credit check myth is that one ACA navigator recently gave an interview explaining a credit check was required, and later retracted the misinformation.

Credit profiles determine how much consumers pay for certain things, like mortgage rates and auto loans, but not an individual health insurance premium. When credit history is used in other insurance, they are called credit-based insurance scores.

“They use it widely in auto insurance premiums and homeowners insurance premiums,” said Gerri Detweiler, Credit.com’s director of consumer education. “It’s understandable that consumers would be worried that their health insurance premiums could be affected by their credit, because it does play a role in the discounts you might get in auto and homeowner’s insurance.”

According to FICO, which produces the most widely used credit score model, credit checks aren’t a part of the health insurance process.

“Neither credit information nor credit scores are allowed to be used for individual health insurance screening,” said FICO Director of Public Relations Anthony Sprauve in an email to Credit.com.

Experian, one of the three major credit bureaus, has been contracted to verify consumers’ identities as they apply for insurance through the exchanges, but the verification does not equal a credit check.

When it comes to choosing health insurance and its impact on one’s finances, it’s most important for consumers to understand how the costs add up and which plans best suit their needs.